India’s coffee landscape is undergoing a transformation, with the premium coffee segment (priced above Rs 200) set to become the dominant force in the market, according to a report by Redseer Strategy Consultants. The premium segment, which accounted for 46% of the market in 2023, is expected to grow to 55-60% by 2028, expanding at a compound annual growth rate (CAGR) of 20-25%.
This shift is driven by affluent coffee drinkers seeking artisanal brewing and unique experiences, making premium coffee more than just a beverage but a lifestyle choice.
Meanwhile, the mass market (priced under Rs 100), which held a 50% share in 2023, is expected to shrink significantly to 30-35% by 2028, growing at a slower CAGR of 8-10%. While affordability remains the hallmark of this segment, the report suggests that it lacks room for premium differentiation, limiting its potential for growth.
The mid-price category (Rs 100-Rs 200), which accounted for just 4% of the market in 2023, is projected to grow substantially to 8-10% by 2028, with a CAGR of 35-40%. This category, with its combination of affordable pricing and quality, is emerging as a key growth area for coffee brands looking to offer specialized brews and enhanced experiences.
Rohan Agarwal, Partner at Redseer Strategy Consultants, noted, “Coffee has evolved from instant and traditional brewing to premium experiences. It is now a lifestyle product for Indian consumers, with the mid-priced category emerging as a whitespace to address the growing demand for inexpensive solutions that provide both quality and an enhanced experience.”
As the market for specialty coffee expands, there are significant opportunities for businesses to introduce high-quality, accessible options that could reshape India’s beverage sector. However, the report also highlights several challenges, including supply chain complexities that affect quality and delivery across regions, as well as the intense competition for prime locations in high-traffic areas such as malls and technology parks.
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